Lapsing into fiscal irresponsibility

"Lapsing into fiscal irresponsibility," says the state of Illinois needs to end the practice of making Medicaid providers wait forever for payment.

In mid-summer, as the governor and lawmakers squabbled loudly about Illinois' budget priorities, something far more significant, budget-wise, happened behind the scenes. The Department of Healthcare and Family Services quietly shipped more than $1.2 billion in Medicaid bills over to the comptroller's office for payment.

See, DHFS had long since burned through its $16 billion spending authority for fiscal year 2007. The start of fiscal year 2008, which began July 1, gave DHFS the new authority it needed to get rid of its billion-dollar backlog. This has become something of a ritual in Illinois — foisting Medicaid obligations from the previous year into the new one. It's called lapse spending. It needs to stop.

First, it's grossly unfair. Shifting these bills enables lawmakers and the governor to pat each other on the back for passing a "balanced" budget, as they are constitutionally obligated to do. But in reality they're balancing the budget on the backs of Medicaid providers — nursing homes, doctors, pharmacies, etc. — sometimes by stretching out the payment reimbursement cycle by several months.

In effect, that makes the state something of a deadbeat, stiffing its suppliers until it sees fit to pay them for services already rendered. This ultimately discourages providers from accepting Medicaid at a time when the governor wants to expand it.

Second, it's unhealthy policy. In previous years Illinois has had to borrow to pay its providers, which costs taxpayers even more money. That the comptroller already has been able to pay off the $1.2 billion is a stroke of fortunate timing. But the bills keep coming. And if DHFS is consistently spending more than it's allowed to, something is deeply wrong. The state must either raise the department's appropriations ceiling — and find corresponding revenue — or make painful and unpopular cuts.

Obviously, any health care expansion should be off the table until Illinois can keep up with the bills it has now.

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